Pursuing Treatments for Biomarker-Driven Cancers and Rare Diseases

Jefferies 2019 Healthcare Conference on June 6, 2019

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Forward Looking Statements

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This presentation and other statements by ArQule contain forward-looking statements within the meaning of the Private Securities Litigation

Reform Act including, without limitation, statements with respect to current and proposed clinical trials with the Company’s product candidates

derazantinib (ARQ 087), miransertib (ARQ 092), ARQ 751 and ARQ 531, financial operations and results, potential corporate partnerships as

well as strategic objectives, business objectives, next steps, pipeline and other goals, clinical targets, projected inflection points, catalysts,

market estimates and potentials, opportunities and other strategies. Forward-looking statements are typically identified by words such as

“believe,” “expect,” “anticipate,” “intend,” “outlook,” “position,” “goal” and similar expressions, or future or conditional verbs such as “will,”

“should,” “would,” and “could.” Forward-looking statements are subject to numerous assumptions, risks and uncertainties. Forward-looking

statements speak only as of today, and ArQule assumes no obligation to update them. Actual results may differ materially from forward-

looking statements or historical performance due to the factors discussed in this presentation and factors previously disclosed in ArQule’s

SEC reports. See discussion of Risk Factors in the Company’s Annual Report on Form 10-K as filed with the SEC. Prospective investors are

cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this presentation. ArQule’s

product candidates are in various stages of development and are not available for sale or use outside of approved clinical trials.

ArQule and the ArQule logo are registered trademarks of ArQule, Inc.

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Experienced Developer of Novel Kinase Inhibitors

Four Novel Oral Compounds in Clinical Development

Biomarker-driven discovery of precision medicines for cancer and rare diseases

with potential for accelerated registration paths

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Reversible BTK inhibitor, ARQ 531, that can overcome ibrutinib resistance – wholly owned

AKT inhibitor, miransertib, in registrational trial for certain rare overgrowth diseases – wholly owned

FGFR inhibitor, derazantinib, in a registrational trial for intrahepatic cholangiocarcinoma – globally partnered

Next-Gen AKT inhibitor, ARQ 751, for solid tumors –wholly owned

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Class Indication Current StageTarget for

Next StageMarket Potential

(est.)

ARQ 531Reversible BTK inhibitor

B-cell malignancies Phase 1a/bPhase 2 Expansion /

Registrational

Large (and growing) blockbuster market potential

MIR

AN

SE

RT

IB RARE DISEASES

AKT inhibitorProteus Syndrome

PROS

Registrational Cohorts

Orphan Designation

Rare Ped. Dis. Des. (PS)

Fast Track Des. (PROS)

NDA Filing

Meaningful aggregate prevalence

Rare Pediatric Disease voucher, if approved

ONCOLOGYAKT inhibitor

Solid tumors / AKT pathway mutations

Phase 1bContinue or transition to ARQ 751

Blockbuster potential in hormone sensitive tumors

ARQ 751Next generation AKT inhibitor

Solid tumors / AKT pathway mutations

Phase 1b Phase 2 Blockbuster potential

in hormone sensitive tumors

DERAZANTINIB FGFR inhibitoriCCA (Intrahepatic cholangiocarcinoma)

Registrational Orphan Designation

NDA Filing

Partnered – up to $400MM in regulatory and sales milestones plus royalties

Summary of Programs and Pipeline Goals

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ArQule’s Proprietary Pipeline

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Product MOA Indication Rights IP1 Key 2019 Catalysts Pre-clinical Phase 1 Phase 2Phase 3 /

Registrational

ARQ 531Reversible BTK Inhibitor

B-cell Malignancies 2035

Final dose selection Commence enrollment of

expansion cohorts Plan registrational trial in C481S

mutated CLL patients (2H19)

Miransertib

AKT InhibitorPROS & Proteus syndrome

2032 Commence registrational cohorts

in both Proteus syndrome and PROS (1H19)

AKT InhibitorSolid tumors / AKT pathway mutations

2032 Present data from Phase 1b

cohorts (2H19)

ARQ 751 AKT InhibitorSolid tumors / AKT pathway mutations

2032

Present data from Phase 1b cohorts (2H19)

Prioritize for further development (2H19)

DerazantinibFGFR Inhibitor

Intrahepatic cholangiocarcinoma (iCCA)

2031

Basilea to pursue expanded development strategy

Sinovant to initiate program in Greater China (1H19)

1. Composition of Matter only, does not include possible extensions2. U.S., EU, Japan and ROW3. China, Hong Kong, Macau and Taiwan

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ARQ 531 Reversible BTK inhibitor in B-cell

malignancies

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B-CELL MALIGNANCIESCURRENT THERAPY

& UNMET NEEDARQ 531 MARKET VALUE

B-Cell malignancies are a diverse group of diseases, including chronic lymphocytic leukemia (CLL), most non-Hodgkin’s lymphomas, other leukemias and myelomas

BTK is an ubiquitous component of the B-cell receptor (BCR) pathway

BTK signaling results in activation of pathways necessary for B-cell proliferation, trafficking, chemotaxis and adhesion

Ibrutinib and acalabrutinib are irreversible BTK inhibitors that covalently bind the catalytic site

Long term treatment with approved BTK inhibitors can leadto mutations, most notably C481S, which leads to resistance

Reversible small molecule next generation BTK inhibitor targeting both WT and C481S-mutant BTK

Potent, orally administered, with predictable PK

Currently in phase 1 trial for B-cell malignancies

Unique kinase profile, inhibits selected members of Tec, Src and Trk families

More than 20,000 patients diagnosed with CLL in the US in 20171

~85% of CLL patients refractory to ibrutinib develop the C481S mutation2

Potential to move into earlier lines of therapy and indications beyond CLL

Potential blockbuster market in CLL alone

Targeting BTK in B-cell Malignancies

71 https://seer.cancer.gov/statfacts/html/clyl.html

2 Woyach J et al. “BTK(C481S)-Mediated Resistance to Ibrutinib in Chronic Lymphocytic Leukemia”. J Clin Oncol. 2017 May 1;35(13):1437-1443

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ARQ 531 Addresses Treatment Resistance via Differentiated Binding Characteristics1

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1.1 Ångstrom resolution crystal structureof ARQ 531 with BTK

Binding mode of ibrutinib with BTK

HEK293T cells

1Reiff SD, Byrd J, Woyach J et al. “The BTK Inhibitor ARQ 531 Targets Ibrutinib Resistant CLL and Richter's Transformation.” Cancer Discov, August 9 2018 DOI: 10.1158/2159-8290.CD-17-1409

ARQ 531

C481

Ibrutinib

Irreversible BTK inhibitors, such as ibrutinib, covalently bind to cysteine in position 481. A

cysteine to serine mutation (C481S) prevents this interaction

ARQ 531 was specifically designed to inhibit BTK regardless of the amino acid

position in position 481

Covalent interaction requires

cysteine in position 481

No interaction

with or requirement for cysteine in position

481

As a result, both inhibit WT BTK, but ARQ 531 also inhibits

C481S BTK

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ARQ 531 Demonstrates Compelling Activity in CLL in vitro and in vivo1

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Vehicle Ibrutinib (25mg/kg)

ARQ 531(50 mg/kg)

ARQ 531(75 mg/kg)

Media

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urv

ival (d

)

Median Survival of Mice

Dose dependent cytotoxicityto CLL cells in vitro at 48h

Superior survival vs ibrutinib in TCL1, a highly predictive murine model of CLL

NotReached

NotReached

Comparative Survival Curves

1Reiff SD, Byrd J, Woyach J et al. “The BTK Inhibitor ARQ 531 Targets Ibrutinib Resistant CLL and Richter's Transformation.” Cancer Discov, August 9 2018 DOI: 10.1158/2159-8290.CD-17-1409

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Ongoing Phase 1 Dose Escalation in Refractory B-cell Malignancies

Dose Escalation ParadigmPhase 1 Trial

Primary Objectives: Establish safety and tolerability of ARQ 531 and recommended phase 2 dose (RP2D)

Secondary Objectives: Preliminary evidence of anti-tumor activity, PK/PD measures

Location: 3+ sites in US with the Ohio State University as the lead

Design: 3+3 dose escalation

Enrollment: 30-50 B-cell malignancy patients refractory to any B-cell therapy, including but not limited to ibrutinib

Target Population:

Patients with relapsed and refractory (R/R) CLL o Must have failed irreversible BTK inhibitoro Median lines of therapy: 5.5 (1-12)

Other patients with R/R non-Hodgkin’s lymphoma

o DLCBL, MCL, WM, FL

ClinicalTrials.gov Identifier: NCT03162536

Expansion at RP2D

Cohort 1: 5 mg QD

Cohort 2: 10 mg QD

Cohort 3: 15 mg QD

Cohort 4: 20 mg QD

Cohort 5: 30 mg QD

Cohort 6: 45 mg QD

Cohort 7: 65 mg QD

Cohort 8: 75 mg QD Current

Cohort cleared for safety and intra-patient dose escalation

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Predictable PK Into the Clinically Relevant RangesHighly Favorable Safety Profile to Date

Interim Phase 1 Data from ASH 2018 Demonstrates Good Safety Profile and Favorable Drug-Like Properties. . . 1

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1Woyach J et al, ASH Annual Meeting 2018

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BTK activity/signaling correlated with substantial reductions after only 1 scan, despite failing multiple prior therapies

BTK activity/signaling profoundly suppressed at predicted doses/concentrations

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-20

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60

80

100

7 20 4 14 1

% S

PD

change

. . . As Well as Profound Pharmacodynamic Effects and Promising Anti-Tumor Activity1

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Low dose range cohorts (1-3) showed an average 50% inhibition

Profound pBTK reductions were achieved at ≥ 20 mg dose levels

However, one patient in the 1st cohort (5 mg) achieved complete pBTKreduction, was later dose-escalated and achieved a confirmed partial

response

CV: Variability of pBTK/BTK ratio determination in the validated whole blood assay was ~±15%

pBTK Inhibition vs Cmax of ARQ 531 by Cohort

Best Responses in Lymphoma (BTK inhibitor naïve)

Durable partial response was observed in one of three

patients with FL

Best Responses in CLL(Heavily pretreated: median 6 therapies)

Anti-tumor activity was observed in heavily pretreated CLL patients with BTK-C481S

mutations with increasing tumor suppression seen at higher dose levels

1Woyach J. et al, ASH Annual Meeting 2018

1 2 3 4 5 60

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100

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% p

BT

K In

hib

itio

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pBTK inhibition by Cohort

Cohort

(5mg) (10mg) (15mg) (20mg) (30mg) (45mg)

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0 200 400 600 800

Mea

n %

pB

TK in

hib

itio

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Cmax, nM

Cohort 6Cohort 5Cohort 4

Cohort 3

Cohort 2

Cohort 1

CV

DLBCLDLBCLFLFL

+

10 mg

45 mg

10 mg

15 mg

45 mg

-50

-30

-10

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70

15 5 2 3 8 11 16 13 18 12 19 23 22

% S

PD

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an

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+++++ +

5 mg10 mg15 mg20 mg30 mg45 mg

+ On study

Patient ID

Patient ID

FL

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Expansion at RP2D

Phase1b Open Label, Multicenter, Study of ARQ 531 in Patients with R/R B-cell Malignancies

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Key Objectives: To determine safety, tolerability and anti-cancer activity

Dose Level: Recommended dose based on phase 1a

Enrollment: An additional 80-100 patients; multiple cohorts (i.e., CLL patients with C481S-mutant BTK)

BTK C481Smutant

Richter’s syndrome

DLBCL

FL

CNS Lymphoma

MCL

WM

CLL

NHL

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MIRANSERTIB AKT inhibitor in Rare Overgrowth

Spectrum Disorders

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OVERGROWTH DISEASES

CURRENT THERAPY& UNMET NEED

MIRANSERTIB MARKET VALUE

Group of diseases characterized by excessive aberrant, asymmetric growth of bones, skin and other tissues

Manifests in early childhood

Proteus syndrome caused by mosaic mutation in AKT1 gene

PROS family of diseases caused by mosaic mutation in PIK3CA gene

No approved systemic treatments for PROS or Proteus syndrome; current Rx relies on expensive and disfiguring surgical amputations

Proteus syndrome: estimated 200-400 patients in the US and Europe1

PROS: estimated 3000 – 6000 patients in US and Europe1

Small molecule pan-AKT inhibitor

Potent, orally administered with predictable PK

Differentiated mechanism of action relative to other AKT inhibitors

Registrational trial cohorts in PS and PROS ready to commence

Meaningful aggregate prevalence across overgrowth spectrum disorders

Rare pediatric disease voucher for PS, if approved

Additional market value outside of US/EU, and in additional indications1

Targeting AKT in Rare Overgrowth Diseases1

151. See presentation “PS & PROS Primer 2019” at arqule.com

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Miransertib Crystal Structure and Mechanism of Action

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Dual mechanism of action:

Binds inactive AKT and prevents membrane localization and activation

Binds membrane associated active AKT: direct inhibition

First generation pan-AKT inhibitor

Potent, orally active, small molecule allosteric inhibitor of AKT

Adapted from www.cbioportal.org

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A Mutation in AKT1 Causes Proteus Syndrome

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Somatic mosaic mutation in the AKT1 oncogene causes Proteus syndrome (PS)

Non-inherited mutation arises randomly during early stages of development before birth

Single point mutation in AKT1 gene causes tissue overgrowth characteristic of PS

Mortality of 25% by age 22

Currently no approved treatments

Clinical Manifestations of the Proteus syndrome in a 12-Year-Old Boy.

A Mosaic Activating Mutation in AKT1 Associated with the Proteus Syndrome

Identification of underlying mutation allows for development of molecularly targeted treatments

Marjorie J. Lindhurst, Julie C. Sapp, Jamie K. Teer…Leslie G. Biesecker

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PROS: A Related Group of Severe Overgrowth Disorders

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PIK3CA-related overgrowth spectrum (PROS) is a group of rare disorders that cause overgrowth of parts of the body due to gain of function mutations in PIK3CA gene

Congential or early onset

Disorders include:

o CLOVES syndrome

o Klippel-Trénaunay syndrome (KTS)

o Megalencephalies (includes MCAP, MPPH, M-CMTC, etc)

o Facial Infiltrating Lipomatosis (FIL)

o Fibroadipose hyperplasia (FH)

o Epidermal Nevi

o Macrodactyly

o Macrodystrophica Lipomatosa

o . . . and many others

Varying degree of severity, with some tissue specific and others pleiotropic

Currently no pharmacotherapy options

Multiple surgical interventions including debulking, amputation and corrective surgery

Patients may suffer from severe functional and cosmetic consequences and progress to becoming poor surgical candidates

Valentini V et al. (2018). Clin Case Rep.Gripp KW et al. (2016). Am J Med Genet ASuzuki Y et al. (2017). OncotargetYatong Y et al. (2018). Ann Plast Surg; 80: 83-89

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Rapid Path to Approval in Both PS and PROS

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Registrational Cohort in PS, N~ 10-12 pts

Registrational Cohort in PROS, N~ 20-24 pts

NDA Filing PS Approval

NDA Filing PROS Approval

RPD Voucher

Design: Open Label

Primary Endpoint: Responder analysis, based on objective criteria (e.g. imaging measurements)

Enrollment: 10-12 months

Time on drug: 12 months to primary endpoint

Dosing: 15 mg/m2 for first 3 cycles, 25 mg/m2 thereafter

Signal Generation Cohort: PS or PROS patients who did not qualify for cohorts 1 or 2

Ph1/2 trial data Comp. use data FDA Interactions

Signal Generation Cohort

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MIRANSERTIB & ARQ 751 Targeted AKT inhibitors in oncology

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CURRENT THERAPY & UNMET NEED

MIRANSERTIB ARQ 751 MARKET VALUE

Currently no approved AKT inhibitors

AKT inhibitors in development, either single agent or in combination, show promise in a molecular defined patient population, e.g., breast, prostate and endometrial cancer

Small molecule pan-AKT inhibitor

Potent, orally administered with predictable PK

Differentiated mechanism of action relative to other AKT inhibitors

Binds to the inactive form of AKT preventing membrane localization and activation as well as binding to active form of AKT with direct inhibition

Orally administered, next generation small molecule AKT inhibitor with predictable PK

Designed to be more potent and selective than miransertib with a wider therapeutic index

3-5% of solid tumors have mutations in the AKT pathway1

PIK3CA mutations present in 32% colon, 27% brain, 25% gastric tumors, 37% endometrial, 31% breast and 2-3% prostate cancers2,3,4

PTEN loss or mutation in up to 59% of stage IV cancers5

Targeting AKT in Oncology

211Yi, KH and Lauring, J, Oncotarget, 7(4): 4241-4251, 2016; 2Millis SZ et.al. JAMA Oncol. 2016;2(12):1565-1573; 3Samuels, Y et al. Science, 304(5670):554, 2004; 4Sun,X et al. Anticancer

Research, 2009;5(29):1739-1743; 5Alfieri R. Giovannetti E, et al. Frontiers in Oncology, 7(710), 2017

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ARQ 751 Trial Design & Next Steps

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Phase 1a/b trial in solid tumors with AKT, PI3K and PTEN mutations

Phase 1a/1b Trial Phase 2 Trial

Key Objectives: Establish safety of ARQ 751, PK/PD measures, recommended phase 2 dose and preliminary efficacy

Location: MD Anderson Cancer Center, Houston TX

Design: open-label, single group assignment dose escalation study

Enrollment: 100 patients

Target Population: Patients with advanced solid tumors with AKT1, 2, 3 genetic alterations, activating PI3K mutations, PTEN-null or other known actionable PTEN mutations

ClinicalTrials.gov Identifier: NCT02761694

Key Objectives: Efficacy of ARQ 751

Dose Level: Recommended phase 2 dose

Enrollment: Molecularly defined patient population

Next Steps

Present data from phase 1b cohorts (2H19)

Initiate additional trial if supported by phase 1b data (2H19)

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ArQule (NASDAQ: ARQL) Financial Profile

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Common Stock O/Sas of December 31, 2018

109M

Market Capas of March 8, 2019

$554M

2019 Expected Use of Cash $35-40M

Projected Cash & Marketable Securities*at December 31, 2019

$60-63M

*Sufficient cash to fund operating expenses into 2021

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